A few days ago, Google and the MPEG-LA announced that they had come to an agreement under which Google received a license for techniques in VP8 that may infringe upon MPEG-LA patents (note the 'if any'). Only a few days later, we learn the real reason behind Google and the MPEG-LA striking a deal, thanks to The H Open, making it clear that the MPEG-LA has lost. Big time. Update:Chris Montgomery: "The wording suggests Google paid some money to grease this along, and the agreement wording is interesting [and instructive] but make no mistake: Google won. Full stop."

You pay an H264 license under limited circumstances as a content distributor for the convenience of having ubiquitous video distribution. H264 is in everything.

You have it the other way around. The circumstances under which you don't pay are limited. The circumstances under which you have to pay are only limited by applicable patent laws.(But then, you could say that you have to pay for any patent under limited circumstances)

Obviously I disagree with your assessment. I think it is clearly spelled out the instances where you are given a free and perpetual license, and even the extent to which you pay no royalties (up to 100k subscribers to a paying video stream, at that point you're both the content creator and the content distributor.)